2022 Mid-Year Outlook:
Economies recalibrated and what’s to come

2023 Outlook

Adjusting to life after Goldilocks

The Goldilocks era for investing of “not too hot, not too cold” — where low inflation and moderate economic growth allowed central bankers to flood the financial system with liquidity — has shifted significantly. We see the magnitude of rate increases moderating, but we believe the market should heed the theme of higher for longer, and act accordingly and that financial conditions will likely tighten further at the start of the year.

Geopolitical Headwinds:
Unlikely to blow over

Soaring inflation gave central banks little choice but to hit the economy with the largest rate hikes in over 40 years throughout 2022.  We do not foresee a large default wave in 2023, as the refinancing calendar for the high-yield bond market will not be significant until 2025. We believe that if central banks are forced to maintain policy rates at these levels to rein in inflation, tighter financial conditions will be a headwind for business fundamentals in 2023. 

Financial Tightening:
No pain, no gain

Soaring inflation gave central banks little choice but to hit the economy with the largest rate hikes in over 40 years throughout 2022.  We do not foresee a large default wave in 2023, as the refinancing calendar for the high-yield bond market will not be significant until 2025. We believe that if central banks are forced to maintain policy rates at these levels to rein in inflation, tighter financial conditions will be a headwind for business fundamentals in 2023. 

Economic slowdown:
How broad, how deep?

How broad, how deep? Despite the clouds building in the economic backdrop, we believe that equity markets will begin to look through the valley of an economic slowdown towards the next business cycle. This will set up for a broad-based equity recovery later in the year. In the meantime, focusing on high-quality companies with near term earnings visibility and low sensitivity to economic growth can provide solid equity returns in the face of higher economic uncertainty.

Financial tightening: No pain, no gain

Soaring inflation gave central banks little choice but to hit the economy with the largest rate hikes in over 40 years throughout 2022.  We do not foresee a large default wave in 2023, as the refinancing calendar for the high-yield bond market will not be significant until 2025. We believe that if central banks are forced to maintain policy rates at these levels to rein in inflation, tighter financial conditions will be a headwind for business fundamentals in 2023. 

Economic slowdown: How broad, how deep?

Despite the clouds building in the economic backdrop, we believe that equity markets will begin to look through the valley of an economic slowdown towards the next business cycle. This will set up for a broad-based equity recovery later in the year. In the meantime, focusing on high-quality companies with near term earnings visibility and low sensitivity to economic growth can provide solid equity returns in the face of higher economic uncertainty.

Geopolitical headwinds:
Unlikely to blow over

The turmoil of 2022 will likely have staying power into the next year and beyond. Geopolitical risks have also been simmering with respect to US-China relations. The ongoing trend of tough-on-China policies deployed by the US is unlikely to change. Heightened geopolitical risks justify a more defensive position in equities, favouring dividend paying companies and higher-quality businesses that exhibit lower volatility.  

Asset mix recommendations


With persistent volatility, we believe the best opportunities in 2023 are to be found among non-US equities
and investment grade corporate bonds.


Equity

Underweight

Neutral

Overweight

Canada
US
International
Emerging markets


Fixed income

Underweight

Neutral

Overweight

Sovereign bonds
IG corporate bonds
HY corporate bonds


2023 Outlook

Mackenzie’s Blue Book provides a near-term view of what the coming year holds for investors.


Long-term capital markets outlook

Mackenzie’s Orange Book includes expert insights to help investors stay focused on long-term returns.


2023 Outlook event

Our CIOs and PMs discuss challenges and opportunities for 2023, and dive into our outlook and asset allocation recommendations.

January 10, 2023 at 1 p.m. ET


2022: The end of the Goldilocks era

Last year will be remembered for new COVID-19 variants, war in Europe, and rising inflation and interest rates. We review the impact these shocks had on the markets.


Environmental outlook

Our sustainability experts weigh in on the challenges and opportunities in the environmental space.  

Meet our contributors


Lesley Marks, MBA, CFA

Chief Investment Officer, Equities
 

Mackenzie Operating Committee


Steve Locke, MBA, CFA

Chief Investment Officer, Fixed Income & Multi-Asset Strategies
 

Mackenzie Operating Committee


Ron Hanson, CFA

SVP Investment Strategy & Portfolio Solutions
 

Mackenzie Operating Committee

William Aldridge, MBA, CFA

SVP Portfolio Manager & Team Co-Lead

Mackenzie North American Equities Team

 

Katherine Owen, MBA, CFA

VP Portfolio Manager

Mackenzie Global Equity & Income Team

Seamus Kelly, MSc

SVP Portfolio Manager & Team Lead

Mackenzie Europe Team

Nick Scott 

SVP Portfolio Manager & Team Lead

Mackenzie Asia Team

Arup Datta, MBA, CFA

SVP Portfolio Manager & Team Lead

Mackenzie Global Quantitative Equity Team

Konstantin Boehmer, MBA

SVP Portfolio Manager & Team Co-Lead

Mackenzie Fixed Income Team

Dan Cooper, CFA

SVP Portfolio Manager

Mackenzie Fixed Income Team

Nelson Arruda, MFin., MSc., CFA

SVP Portfolio Manager & Team Lead

Mackenzie Multi-Asset Strategies Team

Jules Boudreau, MA

Economist

Mackenzie Multi-Asset Strategies Team

Benoit Gervais, MSc, CFA

SVP Portfolio Manager & Team Lead

Mackenzie Resource Team

Wenjie Ding, Ph.D

Investment Strategist

China Asset Management Co.

Justin Truong, CFA

Senior Manager

Mackenzie Investment Strategy

John A. Cook, CIM

Senior Vice President, Portfolio Manager, Team Co-Lead

Mackenzie Greenchip Team

Fate Saghir

SVP, Head of Sustainability, Mackenzie Investments

Mackenzie Sustainability Team

Rebecca Francolini

Senior ESG Analyst

Mackenzie Sustainability Team

Natasha Stromberg

Director Sustainability & Adv Disclosure

Mackenzie Sustainability Team

Ying Du 

VP Head of Mackenzie Investments China 

Mackenzie Investments China

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